In this morning’s data, the Consumer Price Index increased 0.9% in June, higher than expected, and is 5.4% higher on annual basis. Prices of Used Cars and Trucks were again strong, up 10.5% for the month, while Medical Care Commodities and Electricity were slightly negative. The core rate, which excludes prices for food and energy, also increased 0.9% in June, well above estimates, and is up 4.5% on an annual basis. Overall, strong inflationary data continues driven by many of the same categories as in previous months, including used vehicles. The longer higher prices continue, the harder it will be for the Federal Reserve to ignore; especially as core rates are considerably above their 2% average target. This dynamic will be on display as chair Jay Powell will speak to Congress later this week for an update on monetary policy. In all, the 10-year bond yield ticked higher following the release of the data and equity futures are now lower as we head into the market open.
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